8,000 jobs to be cut by Heineken restructuring programme

DUTCH beer group, Heineken NV, has affirmed its intention to cut about 8,000 jobs.

The company made this known on Wednesday, stating the coronavirus pandemic as the reason as it plans to get operation margins back to pre-pandemic levels after the pandemic restrictions caused a sharp decline in profit.

According to the world’s second-largest brewer, under the new CEO Dolf van den Brink’s “EverGreen” plan, two billion euros (2.4 billion dollars) would be saved over the three years to 2023.

Heineken said the savings will be achieved by redesigning its organization; reducing the complexity and number of its products and identifying its least effective spending.

Owing to the review of its operations, about 8,000 personnel would be out of employment, which would lead to a reduction of the personnel expenses by about 350 million euros. The job cut is also expected to cost a total restructuring charge of around €420 million

The plan will be implemented at the end of the first quarter of 2021.

The ongoing restrictions on social gatherings and hospitality venues meant 2021 revenue, operating profit and operating profit margin would be below levels in 2019, the brewer stated further.

Heineken expects gradual market conditions to improve gradually in 2021 and more into 2022, with a slow recovery in European bars and restaurants, less than 30 per cent of which were open at the end of January.

The company said it also expects operating profit margin before one-offs to rise to 17 per cent by 2023, against 12.3 per cent in 2020 and 16.8 per cent.

Heineken got 4.6 per cent weaker in the year to date as shares were down by 2.2 per cent at 0955 GMT

While the Dutch Company maintains an active presence in Nigeria as a substantial shareholder of Nigerian Breweries Plc, it revealed that the restructuring programme would extend to its regional offices. However, no statement has been made on similar actions in key subsidiaries, by the company especially the ones in Nigeria.